We are looking at a modestly higher opening in the early Futures prices after the holiday. But it’s not too even and God only knows what’s really ahead.
First on prices:
- Stock Futures point higher (1/3 pct) but we don’t trust ’em. Too early.
- Inflation fears are back – in a big way. Gold is well over $2900 and Silver is north of $33 while at least one analyst is talking up $3,200 gold by year-end.
- However, Bitcoin is $95,637 early, so the cryptocon has missed the memo – again.
- Talk of peace talks in Riyadh could be hard on “defense” stocks but the AI bubble is still trying for a come-back.
Overnight, Global markets were flattened out after the bubbly of the Yankee Holiday passed. And, with options expiring this week, we have to look at the AGR (annual growth rate) implied by our Aggregate Index work (domestic_).
This Tuesday or Options Week, our Aggregate was pricing 52,867.68 with the hash browns. Same day, last options cycle (with would make it Jan. 14th) the Aggregate was nibbling 50,160.11. Yes, a gain of 5.3978 percent – in a single month!.
Follow the logic here: That works out (compounding for 12-straight months) to an annual rate of 87.923 percent! We inspect – so see if that’s not maybe a little high. But, no: 5.4 X 12-months is a 64.8 percent hike with the additional coming from the compounding effects.
In other words: Bat-shit crazy, nuts, spiked punch bowls, and not much drug testing on Wall Street.
However, it’s not the first time markets have gone crazy. Eventually, they get “over it” either because some party poopers come along, or the sheer weight of all those zeroes eventually implodes. So that’s my Options Week rant.
Except to mention the financial news flow this week is as near to a “nothing burger” as you’ll find. Sure, a few Talking Feds on the BLC (breakfast and lunch circuit). Tomorrow we’re on the edge of our chairs waiting for NY Fed’s Empire State numbers. Wednesday (if we don’t run out of No-Doz) there will be Housing Starts and eTailing mid-morning. There’s a glimmer of interesting in the Fed Minutes due out at 2 PM (Eastern) Wednesday. But they are likely to do little other than underscore how “lost in the woods” even the Banksters are.
Bt by Thursday. if your blood pressure hasn’t spiked, Philly Fed data and jobless claims are likely to finish you off. Come Friday, the only hope of going Lazarus will be found in Canadian consumer prices and some Purchasing Manager data.
I realize you may have nodded off by now. But stay awake: there’s actually something to think about.
The (Non-Medical) TMJ Dope
The lab coat I’m wearing may confuse you into thinking you’re going to get a quick lesson on how to perform TMJ surgery. But alas, we’re not huffing white board markers and doing quack medicine today – if you signed up for that class, go to the Registrar’s Office. See medical wannabes’ know TMJ as Temporomandibular joints (TMJs) that connect your lower jaw to your skull. (They are located in front of each ear, if you’re a medic at a car accident involving a high-speed a bridge abutment and you can’t find your landmarks with a “steering wheel implant” to the chest…. ) Different lecture.
Today’s topic is “Too Much Junk.” Which Americans have, and which is making economists dopey. Well, except maybe regional Fed boss Christopher Waller, who was speechifying overnight at an econ conference in New South Wales.
“While the FOMC has reduced the policy rate 100 basis points since then, yields on the benchmark 10-year Treasury security have increased by a noticeable amount. In theory, longer-term rates should follow the expected path of the overnight policy rate set by the FOMC. But this relationship is based on the classic economic assumption of ceteris paribus, or “all other factors remaining constant.” The 10-year Treasury security trades in a deep, liquid global market, and its yield is affected by a variety of factors other than the path of the policy rate. This means that all other factors are not constant and that the 10-year Treasury yield may not follow the federal funds rate.
Perhaps the most famous example of the divergence of market interest rates and policy rates began in the mid 2000’s. The FOMC was tightening monetary policy from 2004 to 2006 and raised the policy rate 425 basis points. Over that time, Treasury yields barely moved. This was so surprising that Fed Chairman Alan Greenspan referred to it as a “conundrum.” At about the same time, future Chair Ben Bernanke identified what he called a “global savings glut” that was pushing up foreign demand for Treasury securities and putting downward pressure on yields…”
Waller went on several more paragraphs, but this “global savings glut” is something we have talked a little bit about here, and a fair deal about over on the Peoplenomics side of the house. We call the driver of all that ails us “Consumer Super-Saturation.”
In simplest terms: Nothing to buy. And no (resulting) Fix-It or Support-It secondary job creation.
Almost a “throw away” line in his speech, Waller said in passing ” If you want an example of a stable labor market with employment at its maximum level, it looks a lot like where we are right now.”
But that’s the problem. No one we know (both other people) are “Saving Up for Something Big.” Our (semi-adult_) children who don’t already have homes have resigned themselves to un-landed serf status going forward, unable (or unwilling) to sacrifice game updates and travel for a home (for example) because (being White and scared off from childing) they have rolled into the WEF con-job about “having nothing and liking it.”
Yes, to help Gov. Waller along in his path of discovery, when two people have (count ’em) five big screens, and the Biden hangover of ICE-hate is washing through auto sales, the establishment of America as the new Victimology Center of Universe is nearly complete. We have Too Much Junk and Too Few Goals.
We also have too few audits (to find holes in our behaviors) but DOGE is working on that. For now, we just sit out here in the woods. Occasionally sniffing the breeze, awaiting the scent of burning cities to come wafting through. Because destruction and regeneration (artificial demand) will be along sometime. We just can’t say when.
Oh, and the lab coat? It’s how (we think) economic forensics investigators ought to dress for the part. so, is this the part of Spiritual Evolution where the super-glue of attachment to things get completed and then we loose them so that more loosh can be harvested? Not sure, but the lab coats look good and the prices are rising while the junk in the storage units keeps piling up.
To no discernible end.
Pappy Russ’ Scroll Roll
(Papyrus if you’re not awake is explained here. Some pretending to be ‘news’ gleaned from the RSS scanners.)
If Trump ends the Ukraine War, should Joe Biden send refunds? I know – sounds partisan – but we said “squandering drooler” for how long, to no avail? Top Russian and US officials are discussing improving ties and ending the Ukraine war – without Kyiv. For the frosting (and frosty) on that: Vladimir Putin ‘ready to meet Zelensky’, Moscow says as Russia-US peace talks underway. From where we sit, this looks like a case of people getting so wedded to a bad idea (deathing) that they can’t come to their senses even when the audience is groaning. Which rational people have been doing a while, now.
What happens when someone threatens to take the Everclear away from the punch bowl? Well, something like EU leaders gather for an emergency meeting over fear Trump has isolated age-old allies. Old allies, is it? Or patsies?
Our “airline accidents come in 3’s” since updated to “second derivative of body count” seems still in play. With plane too many “near-misses” with disaster. Latest one? Delta Plane Flips Upside Down in Toronto Landing, 15 Hurt, Well, except at first it was 18, then the airport said 17, and now we’re down to 15. Why, wait a week and we may get to no injuries, as this rate. Has math gotten harder, or reality more difficult? Seems to be since the US MSM is still on the Trump-hate wagon. Charlie Kirk on X: “NBC News attempts to blame President Trump for Toronto plane crash due to FAA cuts. FACT CHECK: This happened under Canadian authority under Canadian air traffic control. Facts are so damn bothersome, ain’t they?
Australia swings right: Trump tariffs: Anthony Albanese’s first win could last five years – or five minutes.Because, as with the (in our view unjustified rate cuts ahead of US elections) there’s a whiff of rate politics in play down under. Aussie “Big Four” banks cut rates, mirroring central bank. Yeah, non-partisan bankers. Uh-huh, sure, you betcha.
Now we know why none of that USAID money bought armloads of Peoplenomics subscriptions, I guess: DOGE Uncovers USAID ‘Media Blacklist’ to Censor Reporters Going Against Narrative. Who, us? Meanwhile, how do you make $4.7 trillion of taxpayer money disappear? Department of Government Efficiency on X: “The Treasury Access Symbol (TAS) is an identification code linking a Treasury payment to a budget line item (standard financial process). In the Federal Government, the TAS field was optional for ~$4.7 Trillion in payments and was often left blank, making traceability almost”. Meanwhile, the left’s fear-mongering over Social Security ia trying to whip up DOGE fears – while 20-million Americans over100 have been getting payments? ViseGrips! Details! Jeff Carlson on X: “395 million social security numbers in the database versus 335 million citizens. More than 20 million over age of 100. More than 15 million over age of 110. Fraud, potentially at massive levels. But also huge implications for our elections. Easily fixed. But it wasn’t.”
Radical Lefty’s ought to fear payback: Tom Homan says he has asked Justice Dept. to investigate Ocasio-Cortez for advising illegal aliens on how to evade ICE.
With a big Winter Storm moving in, let’s make Stupid the new national norm, shall we? Democrats Refuse to Consider Repeal of Unworkable, Unaffordable Climate Laws.
With that big storm pressing south from the state of Canada…here’s how this afternoon is stacking up in the puckish and suckish department.
Around the Ranch: Crisis of Stability?
Quiet weekend around the ranch. Which is why we live in a “trailer in the woods” and spend a lot of time outdoors. Elaine counted seven deer jumping the north yard fence on Saturday. Whil the deer munched on that perenial clover I planted last fall for them, a few cats wandered out to watch. But no one ran off – the detente was pleasing. Pastoral.
But it’s not, always. Sunday, 13 big-ass vultures were wandering around looking for missed cat-treats.. Back Monday (having picked off some food left out for the feral puddy-tats, until one cat finally had enough of it. Walked down the fence rail out by the road and simply intimidated the vultures away (with their wings spread, sunning) until they had all flown off. Not a single blow…just walking with purpose.
For a few moments, though, in each of these cases, there was that “moment before change” that held our attention. And that’s how this week seems to line out, to us. Calm before the storm, kind of vibe to it.
Like being at the tippy-top of the roller coaster before the bottom falls out. A mix of anticipation, or fear? A touch, maybe. But more than anything, waiting for the ride status to change from a fleeting slowness – almost like time expanding for a minute – like the vultures and by the end of the month, we get the sense of seat belt testing.
Or, we will be like the deer…still grazing. Tough gambling conditions, for sure.
Write when you get rich or the cold passes (Hank in Hawaii is disqualified)
George@Ure.net
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